DEFENSE LOGISTICS AGENCY

 HEADQUARTERS

 8725 JOHN J. KINGMAN ROAD

 FORT BELVOIR, VIRGINIA 22060-6221

July 12, 2016 

MEMORANDUM FOR SUPPLY AND SUPPLY DISCREPANCY REPORT (SDR) PROCESS 

REVIEW COMMITTEE (PRC) MEMBERS

SUBJECT: Approved Defense Logistics Management Standards (DLMS) Change (ADC) 1202, 

Processing of Advance Shipment Notice (ASN) for Certificate of Conformance 

(CoC) or Alternate Release Procedures (ARP) and Edit Blocking Inappropriate 

Supply Discrepancy Report (SDR) for Missing Quality Assurance Representative 

(QAR) Signature (Discrepancy Code D4) and Associated Suspended Receipt 

(SDR/Supply/Contract Administration) 

The attached change to DLM 4000.25, Defense Logistics Management Standards, is 

approved for implementation. The updated DLMS Implementation Conventions (IC) will be 

posted to the Defense Logistics Management Standards Office Web at

www2.dla.mil/j-6/dlmso/elibrary/TransFormats/140_997.asp, within 10 days from the above date. 

Addressees may direct questions to DLMSOSDR@dla.mil, Ms. Ellen Hilert, DOD SDR 

System Administrator, e-mail: ellen.hilert@dla.mil; or Mr. Ben Breen, SDR Alternate, e-mail: 

benjamin.breen@dla.mil. All others must contact their Component designated Supply PRC 

representative or SDR PRC representative available at:

https://www2.dla.mil/j-6/dlmso/CertAccess/SvcPointsPOC/allpoc.asp. 

HEIDI M. DAVEREDE

Director

Defense Logistics Management 

Standards Office

Attachment

As stated

cc:

ODASD (SCI)

OUSD (AT&L) PDI
Attachment, ADC 1202

Page 1

Attachment to ADC 1202 

Processing of ASN for CoC or ARP and Edit Blocking Inappropriate SDR for 

Missing QAR Signature (Discrepancy Code D4) 

and Associated Suspended Receipt

1. ORIGINATING SERVICE/AGENCY AND POC INFORMATION: Ellen Hilert, DOD

SDR System Administrator, DLMSO, 703-767-0676 or DSN 427-0676, email: 

ellen.hilert@dla.mil, and Benjamin Breen, Alternate DOD SDR System Administrator, DLMSO, 

614-692-2317 or DSN 850-2317, email: benjamin.breen@dla.mil.

2. FUNCTIONAL AREA:

a. Primary Functional Area: Receiving (New Procurement)

b. Secondary Functional Process: Discrepancy Reporting

3. REFERENCES:

a. DLM 4000.25, Defense Logistics Management Standards, Volume 2, Chapter 17,

Supply Discrepancy Reporting. 

b. Defense Federal Acquisition Regulation Supplement (DFARS) Appendix F, “Material

Inspection and Receiving Report” 

c. Federal Acquisition Regulation (FAR) Subpart 46.5, “Acceptance”

d. Approved DLMS Change (ADC) 1066, SDR Process Enhancements: Follow-up

Time Standards, SDR Forwarding, Source of Supply (SoS) Notification, Discrepancy Code D4 

for Missing Quality Assurance Representative (QAR) Signature, use of Unique Item Tracking 

(UIT) Designator Code for Management Report Selection Criteria

4. APPROVED CHANGE(S):

a. Brief Overview of Change: This change establishes a requirement for the Defense

Logistics Agency (DLA) Distribution Standard System (DSS) to capture Certificate of

Conformance (CoC) and Alternate Release Procedures (ARP) indicators when present in the 

DLMS 856 Advance Shipment Notice (ASN) provided via Invoicing, Receipt, Acceptance, and 

Property Transfer (iRAPT), formerly Wide Area Work Flow (WAWF), interface. DSS must 

make this information available during receipt processing and ensure that the receiver does not

improperly suspend new procurement receipts for missing QAR signature and generate an SDR

to the item manager when the CoC or ARP indicator is present. QAR signature is not required 

prior to vendor shipment when the contract authorizes CoC or the Defense Contract 

Management Agency (DCMA) authorized ARP. As a result, the receiving activity does not need 

to prepare an SDR for missing QAR signature when CoC or ARP indicators are present and the 

materiel does not need to be suspended awaiting signature. 
Attachment, ADC 1202

Page 2

b. Background:

(1) Federal Acquisition Regulation (FAR) 46.504 (Reference 3.c.) specifies that

the CoC may be used in certain instances instead of source inspection at the discretion of the 

contracting officer if any of the following conditions apply: 

(a) acceptance on the basis of a contractor’s CoC is in the Government’s 

interest, 

(b) small losses would be incurred in the event of a defect, or 

(c) because of the contractor’s reputation or past performance, it is likely 

that the supplies or services furnished will be acceptable. When contract terms provide for use 

of CoC and shipment is made under these terms, contractors include the appropriate indicator in 

the electronic transaction rather than include or attach the text of the certificate. Government 

acceptance must still be indicated by a Government official’s signature on the iRAPT Receiving 

Report (RR), but is not required prior to shipment. 

(2) The DCMA administrative contracting officer (ACO) implements ARP 

procedures when positive performance history is established. ARP is invoked via 

correspondence with the vendor and no contract clause is applicable. iRAPT shipments under 

ARP only require that the supplier selected/entered the ARP indicator in their shipment notice. 

(3) The primary difference in the requirements for ARP and CoC is the execution 

of Government Contract Quality Assurance (GCQA) surveillance. ARP requires continuing 

surveillance in accordance with the GCQA Surveillance Plan. CoC, on the other hand, is used in 

lieu of GCQA surveillance for the contract on which it is invoked. In each case, the supplier 

releases the deliverable products when they are ready for shipment under the contract, and the 

shipping documents are completed under DFARS Appendix F (Reference 3.b.).

(4) Vendors include indicators in their shipment notice submission to iRAPT

when either CoC or ARP is authorized. Based upon vendor submission, iRAPT transmits a 

shipment notice to DSS for DLA Distribution Center ship-to locations using the DLMS 856 

ASN. 

(5) ADC 1066 (Reference 3.d.) designated Discrepancy Code D4 and prescribed 

associated procedures specifically for reporting of procurement source materiel suspended upon 

receipt due to lack of a QAR signature. This ADC was provided as a way to isolate SDRs 

submitted for lack of a QAR signature so that appropriate attention and prioritization could be 

provided for the situation and the specific SDRs. This was done after the method to facilitate 

returning the suspended stock to serviceable condition more rapidly, developed under the DLAsponsored Continuous Process Improvement (CPI) event in 2011–2012, proved to be inefficient 

and was discontinued. ADC 1066 specifically states that the submission of an SDR for missing 

QAR signature does not apply to ARP or CoC. 

(6) Although receiving personnel are instructed to use iRAPT to identify ARP 

and CoC applicability, recent research by DCMA using SDR management reports found that a 

high percentage of the SDRs with Discrepancy Code D4 for missing QAR signature were 

actually invalid. It was determined that the materiel should not have been suspended because 

either ARP or CoC was authorized. DLA Distribution was notified and the SDRs were 
Attachment, ADC 1202

Page 3

cancelled. However, the SDR often awaits manager review while the materiel remains 

unavailable for issue. The manager will ultimately submit an SDR reply indicating that the SDR 

is rejected and that the materiel must be returned to serviceable condition.

c. Approved Change in Detail:

(1) Modify DSS to recognize inclusion of the ARP or CoC indicator in the 

DLMS 856 ASN and store the ARP and CoC indicators for use upon receipt of the shipment

matching on procurement instrument identifier (PIID)/contract number and contract line item 

number. 

(a) The ARP indicator is located at position 2/REF01/150 Code RE, 

Release Number (see Enclosure 2). 

(b) The CoC indicator is located at position 2/SAC02/320 Code B020,

Certificate of Conformance (see Enclosure 2). 

(2) Ensure that the receiver has visibility on receiver screens of the ARP or CoC 

indicator, when applicable, and is thereby alerted that no QAR signature is required. Materiel 

must not be suspended in Supply Condition Code L awaiting QAR signature (although materiel 

may be suspended for other reasons). 

(3) Establish a new edit in DSS to prevent creation of an SDR with Discrepancy 

Code D4 when ARP or CoC indicators are present.

d. Revisions to DLM 4000.25 Manuals:

(1) Revise DLM 4000.25, Volume 2, Chapter 17 as shown in Enclosure 1.

(2) Update the DLMS IC for the 856 Advance Shipment Notice as shown in

Enclosure 2.

(3) Revise DLM 4000.25, DLMS Volume 1, Concepts and Procedures, Appendix 

3, Acronyms and Abbreviations to add the following new acronyms:

CoC – Certificate of Conformance

ARP – Alternate Release Procedures

e. Transaction Flow: Standard ASN and SDR transaction flows apply with no revision. 

f. Alternatives: None identified.

5. REASON FOR CHANGES: These changes will alert the distribution center receiver when 

shipments are authorized ARP or CoC procedures so that materiel is not suspended 

unnecessarily. This change will eliminate creation of inappropriate SDRs by ensuring that ARP 

and CoC applicability is recognized during receipt processing and blocking creation of SDRs for 

missing QAR signature. 
Attachment, ADC 1202

Page 4

6. ADVANTAGES AND DISADVANTAGES:

a. Advantages: 

(1) Prevents unnecessary suspension of properly shipped new procurement 

materiel making it available for release to the warfighter. 

(2) Prevents unnecessary creation of SDRs allowing for faster receipt processing.

(3) Eliminates research time and effort for item managers when SDRs are 

submitted inappropriately for missing QAR signature.

b. Disadvantages: None noted.

7. ADDITIONAL COMMENTS TO CONSIDER: DLA Distribution will induct new 

procurement materiel in Supply Condition Code A without a QAR signature in iRAPT if either 

the CoC or the ARP box is checked. Otherwise, DLA Distribution will suspend the materiel and 

create an SDR with a D4 discrepancy. This means that there is a potential for CoC or ARP 

materiel lacking QAR signature to be issued prior to QAR signature. Upon preliminary review

of this practice, DLA Inventory Management and Technical Quality representatives believe that 

picking up materiel in Supply Condition Code A when the ARP or CoC boxes are checked 

represents a very low risk based on how ARP/CoC is used (with the understanding that this 

materiel may be issued to customers prior to a QAR signature being posted in iRAPT). To 

reiterate, ARP is only used when the DCMA ACO implements ARP procedures when positive 

performance history is established. ARP requires continuing surveillance IAW the Government 

Contract Quality Assurance (GCQA) Surveillance Plan. CoC is used at the discretion of the 

contracting officer if the following conditions apply: 

a. acceptance on the basis of a contractor’s CoC is in the Government’s interest,

b. small losses would be incurred in the event of a defect, or 

c. based on the contractor’s reputation or past performance, it is likely that the supplies 

or services furnished will be acceptable.

8. ESTIMATED TIME LINE/IMPLEMENTATION TARGET: Request implementation 

early 2017.

9. ESTIMATED SAVINGS/COST AVOIDANCE ASSOCIATED WITH 

IMPLEMENTATION OF THIS CHANGE: For Fiscal Year 2015, there were 3,695 SDRs 

submitted for missing QAR signature to all Components. Based upon a small sampling of SDRs 

(63 SDRs submitted to DLA for a single DCMA contract administration office), 11 percent were 

found to be prepared incorrectly due to authorization for CoC or ARP. Cost savings could be 

extrapolated from the time required to prepare the SDR by the receiving activity and research the 

SDR by the item manager (exact dollar estimates not available at this time). Additionally, there 

is a potential cost avoidance for reducing the amount of suspended materiel that is not issuable. 

This could have a positive operational impact for customer support, as well as savings resulting 

from alternative methods of obtaining urgently needed materiel (e.g. item manager-directed 

lateral redistribution).
Attachment, ADC 1202

Page 5

10. IMPACT:

a. New DLMS Data Elements:

Alternate Release Procedures Indicator (Type: AN, Min: 1, Max: 1) – Indicates 

when a shipment falls under alternate release procedures and does not require a quality 

assurance representative signature prior to shipment.

b. Changes to DLMS Data Elements: None identified.

c. Automated Information Systems (AIS):

(1) Changes to DSS as described above.

(2) Component receiving systems that accept the iRAPT ASN should also be 

programed to recognize ARP and CoC shipments.

d. Transaction Services: No impact.

e. Non-DLM 4000.25 Series Publications: Process revisions require update to internal 

operating procedures.

11. PROPOSED DLMS CHANGE (PDC) 1202 STAFFING RESPONSE/COMMENT 

RESOLUTION:

Originator Response/Comment Disposition

1. DLA Concur

To close the loop for informal staffing of the attached PDC, DLA 

concurs with paragraph 7 as written (J345, J344, J7). DLA does 

not see a high risk to picking up materiel in SCC A if the CoC or 

ARP blocks are checked based on how ARP/CoC is used even if 

issued before QAR signature posts in WAWF (iRAPT).

Noted.

2. DLA 

Distribution 

Concur Noted.

3. DCMA 

Operations

I reviewed the Proposed Defense Logistics Management 

Standards (DLMS) Change (PDC) and fully agree with the 

change. The document accurately addresses DFAR requirements 

and DCMA Policy for accepting items via ARP/COC.

Hopefully, this will avoid unnecessary delays.

Noted.

4. Army Concur Noted.

5. USMC Concur Noted

6. Air Force Concur Noted.

7. AFSAC AFSAC concurs with this PDC. No direct impact seen to FMS 

SDR processing.

Noted.

8. USTRANSCOM After review and coordination, USTRANSCOM abstains on the 

subject PDC. There is no impact to USTRANSCOM systems 

based on this change.

Noted.
Enclosure 1, ADC 1202

Page 1

Enclosure 1, Defense Logistics Manual (DLM) Chapter Revisions

Revise DLM 4000.25, Defense Logistics Management Standards, Volume 2, Chapter 17, Supply 

Discrepancy Reporting, as shown. Changes are identified by bold red italics and strike-though 

text. 

C17.3.2.5. Documentation. Report when documentation is missing, incomplete, or 

improperly prepared regardless of dollar value.

C17.3.2.5.1. Receiving activities must report documentation discrepancies that 

impact timely receipt processing. Typically, this includes missing, incomplete, or improperly 

prepared supply documents such as the Issue Release/Receipt Document (DD Form 1348-1A). 

For shipments from a procurement source, documentation discrepancies apply to the Receiving 

Report/Material Inspection and Receiving Report (MIRR) (DD 250 or equivalent). Shipments to 

DLA Disposition Services may will be reported for a missing, incomplete, or improperly 

prepared Hazardous Waste Profile Sheet or Hazardous Waste Manifest. Transshippers may will

report other types of missing or improper shipment documentation to include Special Handling 

Data/Certification (DD Form 1387-2), Transportation Control and Movement Document 

(TCMD) (DD Form 1384), and the Shipper's Declaration for Dangerous Goods.

C17.3.2.5.2. Sources of supply will prioritize resolution of SDRs submitted by 

DLA Distribution Centers citing Discrepancy Code D4. The objective is to preclude delays in 

reclassifying materiel suspended due to lack of a Quality Assurance Representative (QAR) 

signature in Wide Area Workflow (WAWF) Invoicing, Receipt, Acceptance, and Property 

Transfer (iRAPT). When no other discrepancies have been identified, the SoS will direct the 

depot distribution center to prepare an inventory adjustment to bring the materiel into fully 

serviceable condition upon posting of the QAR signature.1 Note that QAR signature is not 

required for receipt processing when Certificate of Conformance (CoC) or Alternate Release 

Procedures (ARP) are authorized. Use system edits to block inappropriate suspension of 

materiel and submission of SDRs when these procedures are applicable.2

 1 Refer to ADC 1066.

2 Refer to ADC 1202.
Enclosure 2, ADC 1202 

Page 1

Enclosure 2, DLMS Implementation Conventions (ICs)

Revise the DLMS 856 IC as follows:

# Location Change Table for 

856 ASN

Reason

1. DLMS 

Introductory 

Note

Add ADC 1202 to DLMS Introductory note: 

- ADC 1202 Processing of Advance Shipment Notice (ASN) for

Certificate of Conformance (CoC) or Alternate Release 

Procedures (ARP) and Edit Blocking Inappropriate Supply 

Discrepancy Report (SDR) for Missing Quality Assurance 

Representative (QAR) Signature (Discrepancy Code D4) and 

associated Suspended Receipt

To identify DLMS changes 

included in the DLMS.

2. 2/REF01/150 Revise DLMS Note for existing Qualifier RE as shown:

RE Release Number

DLMS Note:

Applicable to Shipment loop. Indicate Y in REF02 when Alternate 

Release Procedures (ARP) are applicable.

DLMS Note updated for 

clarification.

3. 2/SAC01/320 Replace Federal Note with DLMS Note:

Allowance or Charge Indicator

N No Allowance or Charge

Federal DLMS Note:

Use with code B020 in SAC02 to indicate a shipment is made under 

Certificate of Conformance terms.

Revise note level to change the 

existing Federal Note to a 

DLMS Note.

4. 2/SAC02/320 Replace Federal Note with DLMS Note:

B020 Certificate of Conformance

Federal DLMS Note:

Use to indicate when contract terms provide for use of Certificate 

of Conformance, and shipment is made under those terms.

Revise note level to change the 

existing Federal Note to a 

DLMS Note.